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Perpetuities Literacy for the 21st Century

Lynn, Robert J. Ohio State Law Journal, vol. 50, no. 2 (1989), 219-241.http://hdl.handle.net/1811/64479

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Ohio State Law Journal (Moritz College of Law) Ohio State Law Journal: Volume 50, Issue 2 (1989)

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http://hdl.handle.net/1811/64479

Perpetuities Literacy for the 21st Century

ROBERT J. LYNN*

I. INTRODUCTION

The Rule Against Perpetuities ("Rule") in common law or orthodox form is arule of property that under specified circumstances invalidates provisions in trusts andwills regardless of the intention of the settlor or testator. About four decades haveelapsed since Pennsylvania abandoned the Rule in orthodox form and adopted await-and-see version of the Rule.' Thereafter, a scholarly debate ensued on thewisdom of rejecting the Rule in orthodox form in favor of either a wait-and-seeversion or a cy pres version of the Rule (or a combination of the two reform versions).While the debate continued, some states joined Pennsylvania in abandoning the Rulein orthodox form, and others modified the Rule in orthodox form to make it morepalatable. 2 The Section of Real Property, Probate and Trust Law of the American BarAssociation memorialized these changes in the law by preparing and issuing threeeditions of its Perpetuity Legislation Handbook.3 In 1979 the American Law Instituteadopted a draft of the Rule that included both wait-and-see and cy pres features. 4

Finally, in 1986 the National Conference of Commissioners on Uniform State Lawsapproved a Uniform Statutory Rule Against Perpetuities (Uniform Statute) that notonly set out the Rule in orthodox form,5 but also provided that "[a] nonvestedproperty interest is invalid unless... the interest either vests or terminates within 90years after its creation." 6 That is, the Conference complemented the Rule in orthodoxform with a wait-and-see Rule limited by a definite period of time. Further, theUniform Statute provided for cy pres reformation of an interest that violates the Rulein its less rigorous wait-and-see form. 7

Just as the enactment of a wait-and-see statute in Pennsylvania sparked ascholarly discussion of the relative merits of the orthodox Rule and the reformversions, so too the acceptance of a combination of wait-and-see and cy pres versionsof the Rule by both the American Law Institute and the National Conference ofCommissioners on Uniform State Laws has stimulated the publication of articles that,on the one hand, question the desirability of sweeping reform8 and, on the other hand,suggest the course decisions should take under sweeping reforms already adopted. 9

Scholarly writing on the Rule Against Perpetuities is almost invariably exceptionallywell prepared, but many readers find it intimidating.

* Professor of Law, The Ohio State University College of Law.

1. 20 PA. Co.Ns. STAT. ANN. § 6104 (Purdon 1975), amended by § 6104(d) (Supp. 1988), § 6105 (Purdon 1975).2. See, e.g., CONNtt. GEN. STAT. ANN. §§ 45-95 to 45-99 (West 1981).3. ABA Cotm. ON RuLES AGAINST PERPETUmES, PERPEruTy LEGisLATIoN HANDBOOK (3d ed. 1967).4. 56 A.L.I. Peoc. at v (1979).5. UN roRM STATurORY RuLE AGAINST PRPerrrms § l(a)(1), 8A U.L.A. 103 (Supp. 1988).6. Id. § l(a)(2).7. Id. § 3.8. Bloom, Perpetuities Refinement: There Is an Alternative, 62 VAsH. L. Rev. 23, 33-58 (1987).9. Dukeminier, Perpetuities: The Measuring Lives, 85 COLUm. L. REv. 1648, 1654-1701 (1985).

OHIO STATE LAW JOURNAL

What can be said about the Rule in its various forms that is not quite sointimidating and will promote literacy regarding the Rule well into the next century?Will endorsement of reform by the American Law Institute (through the Restatement(Second) of Property) and the National Conference of Commissioners on UniformState Laws (through the Uniform Statute) accelerate the reform movement? Ifsweeping reform versions of the Rule become the norm, will knowledge of the Rulein orthodox form become irrelevant? Does perpetuities reform signal a significantdeparture from traditional American attitudes on control of property by the dead?Responses to these questions are among the matters considered below.

II. THE RULE IN ORTHODOX FORM

It is not a coincidence that the statement of the Rule in wait-and-see form in theUniform Statute is preceded by a statement of the Rule in orthodox form. If aquestioned future interest conforms to the requirements of the Rule in orthodox form,the future interest does not violate the Rule in those jurisdictions retaining the Rulein orthodox form, and if a questioned interest does not violate the Rule in its mostrigorous form, there is no need to resort to either wait-and-see or cy pres reformationin those jurisdictions that have adopted a reform version of the Rule. Working withthe Rule in any of the reform versions assumes familiarity with the Rule in orthodoxform. Law school teaching materials reflect this assumption by setting out cases,problems, and text on the orthodox Rule at some length. '0 Furthermore, irrespectiveof the version of the Rule in force, the careful drafter of a trust instrument or a willmakes certain that he or she conforms to the requirements of the Rule in orthodoxform. By doing so the drafter reduces the likelihood of diminishing the donor's giftsthrough the payment of costs and fees incident to dispute and litigation and avoidsaltogether liability for malpractice attributable to creating a limitation that violates theRule. Therefore, mastery of the fundamentals of the Rule in orthodox form is aprerequisite to mastery of the fundamentals of the Rule in its reform versions. Whatare those fundamentals?

A. Gray's Rule

The best known statement of the Rule in orthodox form is that of John ChipmanGray: "No interest is good unless it must vest, if at all, not later than twenty-oneyears after some life in being at the creation of the interest."" Both law students andlawyers find Gray's statement to be elliptical. Therefore, simplifying the elements ofGray's statement is a starting point for understanding the Rule in any of itscontemporary forms. Four matters respecting the Rule in orthodox form deserveemphasis at the outset.

First, Gray made the Rule Against Perpetuities a rule against remoteness of

10. See, e.g., J. DUKEMINIER & S. JOHANSON, WILLS, TRUSTS, AND ESTATES 769-842 (3d ed. 1984); T. WATEERBURY,MATERIALS ON TRUSTS AND ESTATES 862-903 (1986).

11. J. GRAY, THE RULE AGAINST PERPETUMES § 201 (4th ed. 1942).

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PERPETUITIES LITERACY

vesting. Gray's Rule requires that, to be valid, a future interest be so created that thecontingency attached to it will be resolved within the perpetuities period. Gray's Ruleis not a rule against suspension of the power of alienation.12 And the Rule does notdirectly limit the length of time that a trust might last. 13 Consider a simple example.

If A devises property in trust "to pay the income to B for life, then to B's

children for their lives and the life of the survivor of them, and then to pay theprincipal to the grandchildren of B," and B survives A and "B's children" is givenits usual construction of "B's children whenever born," the gift of principal tograndchildren is void ab initio under the Rule irrespective of whether the gift isinitially classified as a vested remainder subject to open (because a grandchild of Bis alive at A's death) or a contingent remainder (because no grandchild of B has beenborn at A's death). Although the gift to grandchildren is void under the Rule, the trustnonetheless might last beyond the perpetuities period of a life in being at A's deathand twenty-one years because a child of B born after A's death might be the survivorof B's children, and such afterborn child might receive trust income beyond theperpetuities period. There are, of course, rules of property limiting the duration ofcertain kinds of trusts, and such rules do use the perpetuities period as a yardstick formeasuring the length of time that a particular characteristic of a trust is permissible.Nonetheless, the matter of remoteness of vesting should be differentiated fromduration of trusts and termination of trusts. Remoteness of vesting, duration of trusts,and termination of trusts are matters that are related, but they are not the same.

Second, the Rule in orthodox form invalidates contingent future interests intransferees that might vest, if at all, at a time beyond the perpetuities period. Withminor exceptions, it is what might occur-possibilities-rather than what doesoccur-actualities-that proves to be fatal to an interest questioned under the Rule.Possibilities include the conclusive presumption that a person might conceive a childirrespective of physical condition, the eventuality that a will might be offered forprobate at a time beyond the perpetuities period, and the construction of "widow" toinclude a person unborn at the effective date of the instrument. 14 Because future

12. 6 AMERICAN LAW OF PROPERTY § 24.3 (A. Casner ed. 1952) [hereinafter A.L.P.].13. Id. § 24.67.14. These are, respectively, the "fertile octogenarian" case, the "administrative contingency" case, and the

"unborn widow" case.The classic fertile octogenarian case is Jee v. Audley, 1 Cox 324, 29 Eng. Rep. 1186 (Ch. 1787). In substance the

testator bequeathed money to Mary Hall, but if direct descendants of Mary Hall ceased to exist, then to the daughters thenliving of John and Elizabeth Jee. Mary Hall, daughters of the Jees, and John and Elizabeth Jee survived the testator. Thecontingent executory interest was held invalid under the Rule. Although the Jees were aged persons, "daughters" wasconstrued to include daughters born after the testator's death, and if invalid with respect to an unborn daughter, the giftwas invalid with respect to all--the "all-or-nothing" or unit rule on class gifts was applied. Because the testator used theword "daughters" to describe the beneficiaries of the contingent executory interest, as a matter of construction of the willthe gift could have been limited to daughters of the Jees known to t/e testator that is to say, lives in being at the executionof the will, some or all of whom were alive at the testator's death when the will took effect. If confined to such daughters,the gift would have been valid under the Rule because the contingencies would have been resolved, favorably orunfavorably, within the lifetime of each daughter.

The conventional example of the administrative contingency case is a devise or bequest "to B on the probate of mywill." Although B survives the testator, the gift (a contingent executory interest) is invalid under the Rule on theassumption that probate of the will might occur beyond the perpetuities period. "On the probate of my will" should beregarded as redundant. If so, there is no contingency attached to the gift.

The unborn widow case is illustrated by a testamentary gift "to B for life, then to B's widow for life, remainder to

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interests held invalid under the Rule in orthodox form have, in actuality, sometimesvested or failed, as the case may be, within the perpetuities period, the move from apossibilities test for validity to an actualities, or wait-and-see test, has had anunderstandable appeal.

Third, the Rule in orthodox form requires that, to be valid, an interest subject tothe Rule be so created that all contingencies with respect to the interest be resolvedwithin the perpetuities period. It bears emphasis that one or more contingencies mightbe attached to an interest. If A devises land "to B for life, remainder to such of B'schildren as survive B and attain age 21," and B survives A, but no child has been bornto B before A's death, the future interest is a contingent remainder subject to threecontingencies: (1) the birth of a child to B, (2) such child's suriviving B, and (3) suchchild's attaining age twenty-one. Viewed as of the time of A's death, all of thesecontingencies must be resolved within the perpetuities period in order for therequirements of the Rule to be satisfied.

Fourth, although the Rule invalidates an interest subject to the Rule that mightvest, if it vests at all, at a remote time, we determine that a questioned interest isinvalid by trying to demonstrate that it complies with the Rule, and finding ourselvesunable to do so. If our attempt to demonstrate compliance has been performedcorrectly, but we are unsuccessful in proving compliance, the questioned interest isvoid ab initio. If our task is performed incorrectly, we assert invalidity erroneously.If A devises land "to B if alive at the probate of my will," and B survives A, thedevise (a contingent executory interest) is valid under the Rule in orthodox form eventhough we assume that probate of A's will might occur, if it occurs at all, at a remotetime. B's interest is subject to two contingencies: (1) probate of A's will, and (2) B'sbeing alive at the probate of A's will. To qualify for the devise B must be alive whenprobate occurs, "if at all." Therefore, we will know within B's lifetime whether Btakes or whether the devise fails, and B is a life in being at A's death. Had we directedour attention solely to the "administrative contingency"-probate of the will-wewould erroneously have concluded that we could not demonstrate validity.

1. "interest"

Because any version of the Rule is simply a part of the law of future interests,working with the Rule assumes familiarity with the law of future interests,particularly that part of future interest law dealing with the categories of futureinterests and the classification of powers of appointment. When Gray used the word"interest," t 5 he referred to an abstraction that might violate the Rule. The familiar

the children of B then surviving." If B survives the testator, the gift to the widow (a contingent remainder) is valid underthe Rule even though "widow" potentially includes a person unborn at the testator's death. The identity of B's widow,if any, will be established at B's death, and B is a life in being at the testator's death. However, the gift to the childrenof B (a contingent remainder) is invalid under the Rule. The gift is not confined to children of B alive at the testator'sdeath; the gift includes afterborn children. And the gift is not confined to children of B who survive B---they might alsobe required to survive a person who might be unborn at the testator's death: B's "widow." Because the identification ofthe children who share, if any, might be established at a time beyond relevant lives in being at the testator's death andtwenty-one years, the gift to children is invalid.

15. See text accompanying note 11.

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interests, legal or equitable, that might be invalid under the Rule are the contingentremainder, the vested remainder subject to open, and the contingent executoryinterest, interests intended for transferees, rather than future interests retained by atransferor, such as the reversion, the possibility of reverter, and the right of entry forcondition broken. The Rule also encompasses powers of appointment, despite the factthat we do not ordinarily think of a special (or "non-general") power as a propertyinterest, but rather as an ability to shift property from one person or persons to anotherperson or persons. The Rule also encompasses appointments made through theexercise of powers. Although the Rule developed primarily as a means of policing theindiscriminate creation of contingent future interests in family transactions, it hasbeen used to invalidate an option in gross that might be exercisable at some time inthe indefinite future.16 In sum, Gray's word "interest" is simply a convenient wayof directing our attention to a particular part of a property transaction, and applyingthe Rule in orthodox form presupposes skill in identifying that part of a propertytransaction that might pose a perpetuities problem.

Identifying that part of a property transaction that might pose a problem requiresknowledge of all the relevant facts, because the facts affect the existence of gifts, thecharacterization of future interests, and the operation of the Rule. Consider just onedeceptively simple example, with variations in the facts. If A devises land "to B forlife, remainder to that child of B who first attains age 25," we should first determinewhether there is an intended future interest in a transferee that is subject to the Rule.If B predeceases A, and no child of B survived A, we must know whether a child of

B had attained age twenty-five, but predeceased A. If there were such a child, ananti-lapse statute might create a gift by substitution, thus precluding complete failureof the gift. If there were no such child, or if circumstances were such that no gift bysubstitution exists, the intended devise simply fails. But failure is not attributable tothe Rule Against Perpetuities. The gift fails for lack of actual or potentialbeneficiaries, just as it would fail if there were no subject matter of the gift. The Ruleis irrelevant because there is no future interest, even a tentative future interest, thatis subject to the Rule.

To continue with this example, if a child or children of B have survived A, wemust know whether a child of B alive at A's death has attained age twenty-five at A'sdeath. If a child of B has attained age twenty-five at A's death, then, irrespective ofwhether B survived A, that child has a vested interest to which the Rule does notapply. If B survived A, the future interest is an indefeasibly vested remainder. If Bpredeceased A, the child who has attained age twenty-five has an immediate orpossessory interest.

If a child or children of B have survived A, but none has attained age twenty-fiveat A's death, the validity of the devise to the child under the Rule Against Perpetuitiesturns on whether B survived A. If B predeceased A, the devise is a contingent

16. An option in gross is one that is not incident to a lease for years and exercisable during the term. InKentucky-West Virginia Gas Co. v. Martin, 744 S.W.2d 745 (Ky. Ct. App. 1988), and Ferrero Constr. Co. v. DennisRourke Corp., 311 Md. 560, 536 A.2d 1137 (1988), preemptive rights of first refusal were found to violate the Rule.

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executory interest that is valid under the Rule because any child of B alive atA's deathwill be the first child to attain age twenty-five, or will fail to do so, within suchchild's own lifetime, and such child is a "life in being" at A's death. In short, thecontingency attached to the executory interest will be resolved, one way or the other,within the lifetime of each child of B alive at A's death.

However, if a child or children of B have survived A, and none has attained agetwenty-five at A's death, the devise to the child is a contingent remainder that isinvalid under the Rule if B survived A. It is true that with respect to any child of Balive at A's death the contingency will be resolved within such child's own lifetime.But the devise is not confined to a child or children of B alive at A's death. The deviseencompasses possible afterborn children of B, and with respect to an afterborn childof B, it is not certain, viewed as of the time of A's death, that the contingency willbe resolved within the perpetuities period. A possible afterborn child of B might bethe only child of B who attains age twenty-five, and such afterborn child might do somore than twenty-one years after the death of the survivor of B and children of B aliveat A's death. (If the destructibility rule' 7 were in force, the contingent remainderwould be valid under the Rule because it would vest, if at all, during B's lifetime, orbe destroyed under the destructibility rule at B's death. Hereinafter in this article wewill assume that the destructibility rule has been abolished.)

Notice that examining this simple gift (a devise "to B for life, remainder to thatchild of B who first attains age 25") requires considering the law on lapse, theclassification of interests, and the operation of the Rule. If we are asked whether sucha gift is valid under the Rule, our response should be, "What are the relevant facts?"Facts let us determine whether a gift of any kind is precluded, whether a gift bysubstitution might exist under an anti-lapse statute, and whether an intended gift is aninterest unaffected by the Rule or the kind of future interest that is subject to the Rule.Here, as elsewhere in the law, facts make a critical difference.

2. "good"

The Rule in orthodox form is a rule of property or a rule of law that invalidatesan interest that does not conform to the requirements of the Rule. Nonetheless, byusing the word "good,"' 8 Gray stressed that we determine whether an interestviolates the Rule by trying to show that it was so created that it conforms to therequirements of the Rule and is therefore not invalid at its creation, but "good." Ifan interest subject to the Rule is unaffected by it, we conventionally say that theinterest is "good." If an interest subject to the Rule is invalid under the Rule, weconventionally say that the interest is "bad."

17. The destructibility rule has been abolished in about three-fourths of the states, and its existence in the remainingone-fourth of the states is questionable. J. DUKEMINIER & J. KRIER, PROPERTY 249 (2d ed. 1988).


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3. "unless it must vest"

Under the Rule in orthodox form the validity of a questioned interest isdetermined as of the time of its creation. But a contingent remainder, or a contingentexecutory interest, or a vested remainder subject to open has the capacity to changeover time-to vest, that is, to become possessory or be transformed into a vestedestate, or a vested remainder, or a vested remainder in a class no longer subject topossible partial divestment. "Vest" is one of the most intractable abstractions in thelaw of property, but it is worth noting that reform versions of the Rule have not castit aside. The Rule in orthodox form requires that a questioned interest be so createdthat it must (not might) vest, 19 that is, become possessory or be transformed, if at all,within the perpetuities period. Suppose that A devises land "to B for life, remainderto such of the children of B as attain age 21." If B survives A, and "children" isconstrued to mean "children of B whenever born," the gift in remainder is validunder the Rule irrespective of whether at A's death it is classified as a vestedremainder subject to open (because a child of B has attained age twenty-one at A'sdeath) or a contingent remainder (because no child of B has attained age twenty-oneat A's death, or B has no children at A's death). Regardless of classification, thetransformation of the future interest will occur, or the gift will fail in its entirety,within the lifetime of B and twenty-one years.

Let us consider this example in greater detail. If the future interest at A's deathis a vested remainder subject to open, we know at A's death that the gift will not fail,and we will know within B's lifetime and twenty-one years, at the latest, the precisenumber of B's children who will share in the fee simple. All children born to B mightattain age twenty-one before B's death. If so, the vested remainder subject to openwill become an indefeasibly vested possessory estate in fee simple at B's death. If achild or children of B who survive B have not attained age twenty-one at B's death,the class will close at B's death, and the vested remainder subject to open will becomea vested possessory estate in fee simple, subject to possible partial divestment(through a child's attaining age twenty-one after B's death, but within the perpetuitiesperiod).

On the other hand, if the future interest at A's death is a contingent remainder,we will know within B's lifetime and twenty-one years, at the latest, either (1) theprecise number of B's children who share in the fee simple, or (2) that the gift hasfailed in its entirety because no child of B attained age tweny-one. Again, all childrenborn to B might attain age twenty-one before B's death. If so, the contingentremainder will first be transformed into a vested remainder subject to open during B'slifetime, and at B's death, the vested remainder subject to open will become anindefeasibly vested possessory estate in fee simple. If one or more of B's childrenattain age twenty-one during B's lifetime, but one or more who survive B have notattained age twenty-one at B's death, the class will close at B's death, and the vestedremainder subject to open will become a vested possessory estate in fee simple,


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subject to possible partial divestment. If no child of B has attained age twenty-oneduring B's lifetime, but a child or children of B survive B, the class will close at B'sdeath, and the reversioner will be entitled to possession. The contingent futureinterest (irrespective of whether it is still classified as a contingent remainder or isreclassified as an executory interest) will become a vested possessory estate in feesimple, subject to possible partial divestment, if a child of B attains age twenty-oneand there is, at that time, a sibling or siblings who have not yet attained agetwenty-one.

Finally, in this example, if the future interest at A's death is a contingentremainder, it is possible, of course, that no child of B will attain age twenty-one.Viewed as of the time of A's death, (1) B might never have a child, or (2) all childrenborn to B might die during B's lifetime without attaining age twenty-one, or (3) allchildren born to B might fail to attain age twenty-one, some dying during B's lifetimeand others dying after B's death. Under any of these circumstances, the contingentremainder will never vest, but willfail by its own terms within the perpetuities period.Conformity to the Rule does not assure vesting. Conformity merely assures that anyand all contingencies will be resolved within the perpetuities period.

4. "if at all" 20

From the fact, then, that a questioned interest is "good" or valid under the Rule,it does not follow that the intended beneficiary of the interest invariably will enjoy itin the usual sense. In order that an interest be deemed valid under the Rule, it isessential that the interest be so created that it will either vest, or fail by its own terms,within the perpetuities period. Let us consider another example. If A devises land "toB for life, remainder to C if C attains age 21," and both B and C survive A, but Cis ten years of age at A's death, C has a contingent remainder that is valid under theRule. C will attain age twenty-one, or die before attaining age twenty-one, within hisown lifetime-the contingent remainder will vest, or fail, within the lifetime of C, aperson in being at A's death. (It will also vest, or fail, within the lifetime of B andtwenty-one years, or simply within the "period in gross" of twenty-one years.) Whatthe Rule requires is that an interest be so created that a contingency with respect toit will be resolved, favorably with respect to the beneficiary, or unfavorably, as thecase may be, within the perpetuities period of a life in being at the creation of theinterest and twenty-one years.

5. "some life in being" 21

Under the Rule in orthodox form, a future interest subject to the Rule is void abinitio unless it is so created that the contingency affecting it will be resolved withinthe "perpetuities period'--a length of time measured by a life in being at the creationof the interest and twenty-one years.

20. See text accompanying note 11.21. See text accompanying note 11.

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Defining a life in being has proved to be elusive. Therefore, descriptions of theoperation of the Rule customarily include hypothetical cases illustrating identificationof an appropriate life in being for purposes of demonstrating the validity of an interestthat is being questioned under the Rule. It is true that in some instances more than onelife in being can be used to demonstrate validity. For example, if A devises land "toB for life, remainder to C if C attains age 21," and both B and C survive A, but Cis ten years of age at A's death, the condition attached to C's contingent remainderwill be resolved within B's lifetime and twenty-one years or within C's lifetime. BothB and C are lives in being at A's death. The contingency will also be resolved withinthe "period in gross" of twenty-one years. 22 It bears emphasis that if the validity ofa questioned interest can be demonstrated in just one way, that is sufficient. Thatvalidity might be demonstrated in other ways is of interest, but it is unnecessary.

Although a life that is appropriate for demonstrating validity need not be abeneficiary under the dispositive instrument, and need not be mentioned in thedispositive instrument, an appropriate life has some relevant connection with thedisposition.2 If A devises land "to such of my grandchildren as attain age 21," andA is survived by children but no grandchild of A has attained age twenty-one at A'sdeath, the contingent future interest (in this case, an executory interest) is valid underthe Rule because any grandchild of A who shares in the gift will necessarily beidentifiable within the lifetime of a child of A alive at A's death and twenty-oneyears. That A's children are not themselves beneficiaries and are not specificallymentioned in A's will does not preclude using their lives to demonstrate validity.

An actual period of gestation is included in the perpetuities period. Suppose thatA devises land "to the firstborn child of B for life, remainder to the children of suchchild," and B survives A, having had no children during A's lifetime, but havingconceived a child before A's death who is born alive after A's death. Because thefirstborn child was conceived before A's death, such child is treated for propertypurposes as alive at A's death. The gift for life to such child is an immediate interestto which the Rule does not apply. The gift of the remainder (a contingent remainder)is valid under the Rule because it is certain to vest or fail, as the case may be, withinthe lifetime of the firstborn child, a life in being at A's death.

A drafter may lawfully provide a reasonable number of lives in being for thepurpose of measuring the perpetuities period, but drafters do not usually do so.Instruments with a carefully crafted perpetuities savings clause assure compliance

22. See infra subpart 6.23. Professor Dukeminier has consistently and persuasively maintained that the person whose life is used to

demonstrate validity of a questioned interest must have a causal relationship to vesting. His definitive article isPerpetuities: The Measuring Lives, 85 COLUM. L. REv. 1648 (1985). Although Professor Dukeminier's view has beenchallenged in Waggoner, Perpetuities: A Perspective on Wait-and-See, 85 CoLut, L. REv. 1714 (1985), Dukeminier'srejoinder, A Response by Professor Dukeminier, 85 CoLusi. L. REv. 1730 (1985), and his later articles, A Modern Guideto Perpetuities, 74 Ca.u'. L. REv. 1867 (1986), and The Uniform Statutory Rule Against Perpetuities: Ninety Years inLimbo, 34 UCLA L. REv. 1023 (1987), assure that Professor Dukeminier's analysis will prevail. Just as Professor Leach'sPerpetuities in a Nutshell, 51 H.Av. L. REv. 638 (1938), and Perpetuities: The Nutshell Revisited, 78 HAev. L. REv. 973(1965), have been the perpetuities bible for several generations of law students and lawyers, so too will ProfessorDukeminier's A Modern Guide to Perpetuities be the perpetuities bible for the legal profession for the foreseeable future.

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with the Rule by requiring that all property interests become absolute and possessoryat the latest at the end of the perpetuities period.

6. "twenty-one years"2 4

If a questioned future interest is so created that the contingency will be resolvedwithin twenty-one years, the interest is valid, and it is unnecessary to identify a lifein being at the creation of the interest for the purpose of demonstrating validity. If Adevises "to B if B is alive twenty years after my death," and B survives A, thecontingent future interest (an executory interest) is valid because the contingency willbe resolved within the period in gross of twenty-one years, and that in itself issufficient to satisfy the requirements of the Rule. The contingency will also beresolved within B's lifetime, and B is a life in being at A's death. However, if Adevises "to such of my lineal descendants as are alive twenty years after my death,"the contingent future interest (an executory interest) is valid only because the persons,if any, who share in the gift will be identified within the period in gross. In this caseit is not possible to identify a life in being at A's death for the purpose ofdemonstrating validity.

7. "at the creation of the interest"25

For perpetuities purposes, an interest created by will is created at the death of thetestator. If created by deed, an interest is created on delivery. If created byirrevocable trust, an interest is created on establishing the trust. If created byrevocable trust, an interest is created when the trust becomes irrevocable, commonlyon the death of the settlor. (The revocable trust is assimilated to the will forperpetuities purposes, because outstanding interests are subject to destruction throughthe right to revoke.)

8. Gray's Rule amplified

If we amplify Gray's Rule in the way suggested above, it reads as follows: "Nointerest [that is, contingent remainder, contingent executory interest, or vestedremainder subject to open] is good [that is, valid at its creation] unless it must vest[that is, be so created as to become possessory or be transformed into a vested estate,or a vested remainder, or a vested remainder in a class no longer subject to possiblepartial divestment], if at all [for the interest, though valid, may "fail by its ownterms"], not later than twenty-one years after some life in being at the creation of the[questioned] interest."

Again, it bears emphasis that this expanded statement of Gray's Rule is stillgeneral in nature, and that it does not clearly encompass powers of appointment andappointments made through the exercise of powers. In sum, amplifying Gray's Rulegives us a better appreciation of Gray's skill at distillation and makes us aware of its

24. See text accompanying note 11.25. See text accompanying note 11.

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dependence on mastery of the fundamentals of the law of wills, trusts, and futureinterests.

B. Powers and Appointments

The Rule in orthodox form might invalidate a power of appointment at itscreation, or the Rule might invalidate an appointment made through the exercise ofa power that is itself valid. A power is a general power if the holder of the power mayappoint to anyone, including the holder of the power or the holder's estate. A generalpower to appoint by deed or will that is acquired contemporaneously with its creationis exempt from the Rule. If A devises land "to B for life, remainder to such personor persons as B by deed or will appoints," and B survives A, the power in B is theperpetuities equivalent of an indefeasibly vested remainder and is exempt from theRule. However, if the acquisition of a general power to appoint by deed or will isdeferred beyond the effective date of the instrument creating the power, the power isvalid only if it is so created that it must be acquired, if acquired at all, within theperpetuities period. 26 If A devises "to B for life, remainder to such person or personsas the first child born to B by deed or will appoints," and B survives A but has nochild at A's death, the power is valid under the Rule because a child of B will acquirethe power, if at all, within B's lifetime.

A power is a special power if the holder of the power may appoint to anyoneother than the holder of the power or the holder's estate. A special power is usuallya power to appoint to a class-for example, children of the holder of the power. Forperpetuities purposes, a general testamentary power (a general power exercisableonly by will) and a special power are equivalent. A general testamentary power or aspecial power that is so created that it might be exercised beyond the perpetuitiesperiod is invalid under the Rule in orthodox form.27 If A devises land "to B for life,then to B's children for their lives, remainder to such of B's grandchildren as the firstchild born to B by deed or will appoints," and B survives A but has no children at A'sdeath, the power is invalid under the Rule because it might be exercised at a timebeyond B's lifetime and twenty-one years.

Because holding a general power to appoint by deed or will is so close toownership of the subject matter of the power, the validity of an appointment made bythe exercise of such a power is determined by computing the perpetuities period fromthe time the power is exercised.28 We view the appointment as if it were a grant ora devise by the owner of property. If A devises land "to B for life, then to B's childrenfor their lives, remainder to such person or persons as C by deed or will appoints,"and both B and C survive A, and C by deed appoints the remainder "to D for life,remainder to D's children, share and share alike," the appointment is valid under theRule. It is as if C, owning in fee simple absolute, had granted "to D for life,remainder to D's children share and share alike." The remainder created for D's

26. See A.L.P., supra note 12, § 24.31.27. Id. § 24.32.28. Id. § 24.33.

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children is either vested subject to open (if D has a child at the time C makes theappointment) or a contingent remainder. But irrespective of classification, the futureinterest is valid under the Rule because the contingency attached to the appointment(the birth of a child to D) will be resolved within D's lifetime, and D is a person inbeing when C exercises the power.

Because the creator of a general testamentary or a special power has restricted

exercise of the power by excluding the holder of the power from the group ofpermissible appointees, the holder of such a power is viewed as an extension of the

creator of the power when the holder exercises the power. Therefore, whendetermining the validity of an appointment made by the exercise of a general

testamentary or a special power, the perpetuities period begins to run when the power

is created, and the appoinment is "read back" into the instrument creating thepower.29 If A devises land "to B for life, remainder to such of the children of B as

B by deed or will appoints, and in default of appointment, remainder to C," and both

B and C survive A, and B by will appoints the remainder "to such of my children as

survive me, share and share alike," the appointment is valid under the Rule. "Read

back" into A's will, it is as if A had devised "to B for life, remainder to such of the

children of B as survive B, and if no child of B survives B, remainder to C." The

identity of the children of B who survive B, if any, is fixed at B's death, and B is aperson in being at A's death, when the special power was created.

Although the holder of a general testamentary or a special power is viewed as an

extension of the creator of the power, and the validity of an appointment made by theexercise of such a power is determined by computing the perpetuities period from the

time the general testamentary or the special power is created, facts existing when the

appointment is made are taken into account. 30 (This aspect of the Rule in orthodox

form is a precursor of the wait-and-see approach.) If A devises land "to B for life,remainder to such of the children of B as B by deed or will appoints, and in default

of appointment, remainder to C," and both B and C survive A, and B by will appoints

the remainder "to such of my children as attain age 25," the appointment is valid

under the Rule provided the youngest child of B is four or more years of age at B's

death. When B's appointment is "read back" into A's will, and the facts existing atB's death are taken into account, it is as if A had devised "to B for life, remainder

to such of B's children as survive B and attain age 25 no later than twenty-one years

after B's death, and if no child of B survives B and attains age 25 no later than

twenty-one years after B's death, remainder to C." The number of children of B whoshare, including those born after the creation of the power, will be fixed at the latest

within twenty-one years after the death of B, a person in being at the creation of thepower.

29. Id. § 24.34.30. Id. § 24.35.

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C. Class Gifts

A gift to a class is typically to "children" or "grandchildren" or "nephews andnieces." If a gift to a class includes a future interest to which a contingency isattached, the gift in its entirety might violate the Rule in orthodox form. A class giftis totally invalid under the Rule unless the ultimate number of persons sharing in thegift is determinable within the perpetuities period. 31 That is, if invalid as to onemember of the class, the gift is invalid as to all. This "all-or-nothing" aspect of theRule competes with the "conclusive presumption of fertility" aspect for thequestionable distinction of being the principal feature of the Rule in orthodox formthat has brought the Rule into disrepute and has resulted in modifications of theorthodox Rule in some states and abandonment of the orthodox Rule in others.

The application of the Rule to class gifts is most easily understood byconsidering some examples of class gifts. If A devises land "to such of B's childrenas attain age 25," we should first determine whether there is an intended futureinterest in a transferee that is subject to the Rule. If B predeceased A, and no childof B survived A, we need to know whether a child of B had attained age twenty-five,but predeceased A. If there were such a child, an anti-lapse statute might create a giftby substitution, thus precluding complete failure of the gift. But if there were no suchchild, or if circumstances were such that no gift by substitution exists, the intendeddevise simply fails. But, again, failure is not attributable to the Rule AgainstPerpetuities. The gift fails for lack of actual or potential beneficiaries. Hereinafter inthis Article we will assume that no gift by substitution exists under an anti-lapsestatute. Nonetheless, it bears emphasis that the possible impact of an anti-lapse statuteshould not be ignored.

To continue with this example, if a child or children of B have survived A, wemust know whether a child of B alive at A's death has attained age twenty-five at A'sdeath. If a child of B has attained age twenty-five at A's death, then, irrespective ofwhether B survived A, only children of B alive at A's death are permitted under theclass-closing rules32 to share in the gift. (The child of B who has attained agetwenty-five meets the description of the beneficiaries of the gift in every respect, andthere is no outstanding life estate preceding the gift to the children of B that precludesa beneficiary who meets the description from seeking immediate possession.) If allchildren of B alive at A's death have attained age twenty-five at A's death, the gift inits entirety is a present or immediate interest, and the Rule does not apply to presentor immediate interests. However, if there is a child of B alive at A's death who hasattained age twenty-five at A's death, and there is another child or children of B aliveat A's death under twenty-five, the child of B who has attained age twenty-five hasa vested possessory estate in the land, subject to possible partial divestment becausethere is another child or children of B alive at A's death who might attain agetwenty-five. (The child of B who has attained age twenty-five at A's death is certain

31. Id. § 24.26.32. The closing of the class means that an afterborn child of B does not share. Our knowing that a class has closed

does not in itself tell us precisely who shares-it tells us who does not share.

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to share, but at A's death we do not know the exact number of children who willshare.) Such other child or children take by way of contingent executory interests.But such executory interests are valid under the Rule because any child of B alive atA's death will attain age twenty-five, or fail to do so, within such child's ownlifetime. In short, the contingency attached to the executory interest will be resolved,one way or the other, within the lifetime of each child of B alive at A's death who hasnot attained age twenty-five at A's death.

Let us assume two other variations on the facts at A's death. If there is a childor children of B alive at A's death, but none has attained age twenty-five at A's death,we must know whether B survived A. If B did not, only a child or children of B aliveat A's death will attain age twenty-five and thus qualify as beneficiaries. Again, achild of B alive at A's death will attain age twenty-five, or not, within such child'sown lifetime. All children who share in the devise take by way of valid contingentexecutory interests; the first to attain age twenty-five acquires a vested possessoryestate in the land, subject to possible partial divestment if such child, on attaining agetwenty-five, has a sibling or siblings who might attain age twenty-five thereafter.

If there is a child or children of B alive at A's death, but none has attained agetwenty-five at A's death, the fact that B survives A precludes demonstrating that thegift to the children of B is valid. Under the Rule in orthodox form, a gift to a classis treated as a unit. If the gift is invalid as to one member of the class, it is invalidas to all. Although a child of B alive at A's death will attain age twenty-five, or failto do so, within such child's own lifetime, the class is open at A's death, in this case,to admit a child or children born to B after A's death. Because a possible afterbornchild of B might attain age twenty-five beyond the period of a life in being at A'sdeath and twenty-one years, the gift to the children of B who attain age twenty-fiveis invalid in its entirety under the unit rule on class gifts.

In sum, if a testator devises land "to such of B's children as attain age 25," weneed to know whether a child of B has attained age twenty-five at A's death (thusclosing the class at A's death and confining the gift to children of B alive at A'sdeath). If no child of B has attained age twenty-five at A's death, we need to knowwhether B survived A. If B did not, the class closes at A's death irrespective of theages of B's children alive at A's death. If B did survive A, the class is open at A'sdeath, and the gift fails in its entirety under the unit rule on class gifts.

Notice that examining this simple gift (a devise "to such of B's children as attainage 25") requires considering the law on lapse, the classification of interests, themechanics of class gifts, and the operation of the Rule in the context of class gifts.If we are asked whether such a gift is valid under the Rule, again our response shouldbe, "What are the relevant facts?" Facts let us determine whether a gift of any kindis precluded, whether a gift by substitution might exist under an anti-lapse statute,and whether an intended gift is a possessory interest, unaffected by the Rule, or thekind of future interest that is subject to the Rule.

The fact that a gift to a class is preceded by a life estate affects the closing of theclass, and therefore affects the application of the Rule to a class gift. If A devises land"to B for life, remainder to such of B's children as attain age 25," and B predeceases

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A, the class gift cannot violate the Rule in orthodox form even though a child of Bwho survives A has not attained age twenty-five at A's death. Because B haspredeceased A, any child of B alive at A's death who has not already attained agetwenty-five at A's death will attain age twenty-five, or fail to do so, within suchchild's own lifetime, and such child is a life in being at A's death. But if B survivesA, the class gift is invalid in its entirety under the Rule, irrespective of whether a childof B alive at A's death has already attained age twenty-five at A's death. A child ofB alive at A's death who has attained age twenty-five at A's death meets thedescription of the remaindermen in every respect, but the existence of the life estateprecludes such a child of B from calling for possession of the land. The class istherefore open at A's death to admit possible afterborn children of B. A child mightbe born to B after A's death, and such afterborn child might attain age twenty-five ata time beyond B's lifetime, or the lifetime of a child of B alive at A's death, andtwenty-one years. The possibility that an afterborn child of B might attain agetwenty-five beyond the perpetuities period invalidates the class gift altogether.

If A devises land "to B for life, then to B's children for their lives, remainderto B's grandchildren," and B survives A, the gift to B's children is open at A's deathto admit afterborn children of B. Irrespective of whether that gift is classified as avested remainder subject to open (because B has a child alive at A's death) or isclassified as a contingent remainder (because B has no child alive at A's death), thegift complies with the requirements of the Rule. Any child of B sharing in the gift isidentifiable at B's death, and B is a person in being at A's death. However, the giftto B's grandchildren is invalid in its entirety under the Rule in orthodox form. The giftto grandchildren is open at A's death to admit afterborn grandchildren of B.Irrespective of whether that gift is classified as a vested remainder subject to open(because B has a grandchild alive at A's death) or is classified as a contingentremainder (because B has no grandchild alive at A's death), it is possible that B mighthave a child after A's death, and that afterborn child of B might be the survivor of B'schildren. As long as a child of B is alive, grandchildren of B are not entitled topossession of the land, and the class remains open to admit further grandchildren.Because the afterborn child of B might have an afterborn child at a time beyond thelifetime of any relevant life in being and twenty-one years, the gift to B'sgrandchildren is invalid.

If the gift to B's grandchildren set out in the preceding paragraph were createdby A as a gift to subclasses, some or all of the gift might be valid. Suppose that Acreates a testamentary trust "to pay the income to B for life, then to pay the incometo the children of B for their lives, and upon the death of a child of B survived byissue, to pay that share of principal upon which such child was receiving the incometo such child's then surviving issue, per stirpes." B survives A and dies thereaftersurvived by children C, D, and E. C and D were alive at A's death; E was bornthereafter. Because any gift of income will become possessory at B's death, and B isa person in being at A's death, no gift of income to an afterborn child of B can violatethe Rule. The gifts of principal to the issue of B's children (all contingent remainders)are valid with respect to the shares of principal represented by C and D, persons in

19891


being at A's death, but invalid with respect to the share represented by E, an afterbornchild of B. Valid gifts of principal are separated from the invalid and are permittedto stand. 33

If the amount that a member of a group takes is not dependent upon the numberin the group, the "all-or-nothing" rule does not apply. A bequeaths "$10,000 to eachchild of B who attains age 25." B survives A and has four children at A's death, oneof whom, C, has attained age twenty-five at A's death. C meets the description of alegatee in every respect and is entitled to $10,000. Each of the other three childrenof B is a person in being at A's death and will attain age twenty-five, or fail to do so,within such child's own lifetime. Each of these three executory interests is validunder the Rule,34 and the personal representative of A's estate sets aside a sumsufficient to pay these gifts. With respect to gifts intended for unborn children of Bthe result is different. As a matter of convenience in administering A's estate,afterborn children of B are precluded from taking because the number of suchchildren is speculative. Even if a state were willing as a matter of estate administra-tion to delay closing A's estate until B's unborn children, if any, attain agetwenty-five, or fail to do so, the executory interests intended for B's afterbornchildren are invalid under the Rule because the contingency attached to the gifts is notcertain to be resolved within the perpetuities period. Note that excluding unbornchildren of B as a matter of estate administration precludes gifts to afterborn childrenthat would not violate the Rule, for example, "$10,000 to each child of B who attainsage 21."

D. Separability of Gifts on Express Alternative Contingencies

Suppose that A bequeaths $10,000 "to that child of B who first becomes alawyer, but if B dies never having had a child, or if no child of B becomes a lawyer,then to C." B and C survive A, but no child of B is a lawyer at A's death. The giftsto B's child and to C are contingent executory interests. The gift to the child is invalidunder the Rule in orthodox form because the contingency is not certain to be resolvedwithin the perpetuities period. The gift to C that is conditioned on no child of Bbecoming a lawyer is also invalid for the same reason. But the gift to C that isconditioned on B dying never having had a child is valid because the contingency willbe resolved at B's death. The valid gift to C is separated from the invalid gifts andis permitted to stand. Had the drafter failed to express the alternative contingenciesattached to the gifts to C, all of the gifts would be invalid under the Rule. Forexample, suppose that A bequeaths $10,000 "to that child of B who first becomes alawyer, but if no child of B becomes a lawyer, then to C." Although the gift to C isalso implicitly conditioned on B dying never having had a child, the gift to C isnevertheless invalid. 35

33. See Cattlin v. Brown, 11 Hare 372, 68 Eng. Rep. 1319 (Ch. 1853).34. See Storrs v. Benbow, 2 My. & K. 46, 39 Eng. Rep. 862 (Ch. 1833). See also J. GRAY, supra note 11, § 389.35. See A.L.P., supra note 12, § 24.54.

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E. Commercial Transactions

Although the Rule Against Perpetuities was fashioned by judges to police theindiscriminate creation of contingent future interests that are a part of gratuitousintrafamily transfers, the Rule has been applied to commercial transactions. Anoption to purchase land that is not incident to a lease and exercisable during the term(an "option in gross") is void ab initio if it is so created that it might be exercisedbeyond the perpetuities period. 36

F. Infectious Invalidity

In a separate property state, if a surviving spouse successfully seeks a forcedshare of the decedent's estate by electing to "take against the will," we allocate anappropriate share of the estate to the spouse, "sequester" any gifts to the spousemade by the rejected will, and then we apply the surviving terms of the will to thebalance of the net probate estate as best we can. If rejection of the will by the electingspouse results in such distortion of the testamentary plan that the intention of thetestator cannot be realized, we allow the balance of the net probate estate to pass byintestacy. Similarly, if a limitation violates the Rule, we excise it from the dispositiveinstrument and give effect to the instrument as if the invalid limitation had not beenwritten. However, if the invalid limitation was such an integral part of the donor'sdispositive plan that it cannot be excised without altogether distorting the plan,limitations that do not violate the Rule might fall with the invalid limitation on thebasis of "infectious invalidity." '37

G. Summary of the Rule in Orthodox Form

How might we summarize the way we examine a deed, a will, or a trust in a statethat has the Rule in orthodox form?

First, we place ourselves at the time the instrument takes effect for perpetuitiespurposes, and we assemble facts as of that time that permit us to classify interests inaccordance with the generally accepted rules of construction.

Second, if our classification of interests turns up a future interest in a transfereethat is subject to a contingency, we try to show that the questioned interest will eithervest or fail, as the case may be, within a period that does not exceed that measuredby the lifetime of a relevant life in being at the creation of the interest and twenty-oneyears. When demonstrating that the questioned interest satisfies the requirements ofthe Rule, we assume what might occur (possibilities), viewed as of the time theinstrument takes effect, rather than what has in fact occurred (actualities) since theinstrument took effect. Possibilities include assumptions that are contrary toexperience ("fantastic possibilities").

Finally, if we cannot demonstrate that the questioned interest is valid under the

36. Id. § 24.56.37. Id. §§ 24.47-.52.

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Rule, it is void ab initio, and we read the dispositive document as if the invalidinterest had been omitted from the instrument.

IH. REFORM VERSIONS OF THE RULE

Although numerous jurisdictions have moved away from the Rule Against

Perpetuities in its common law or orthodox form, there has been no uniformity in

either the source or the nature of reform. Most of the reform versions of the Rule have

originated in legislatures, but occasionally reform has been judge-made. A reformversion of the Rule may simply abandon aspects of the Rule in orthodox form that are

deemed particularly offensive, such as the conclusive presumption of fertility. 38 This

kind of reform leaves the Rule in orthodox form substantially intact. Other reform

statutes abandon the Rule in orthodox form altogether and embrace a wait-and-see

Rule, or a cy pres Rule, or a wait-and-see Rule complemented by cy pres. Statutesreforming the Rule vary from brief statements assuming familiarity with the rule in

orthodox form to elaborate enactments intimidating in their detail. 39 Variations on the

period in gross of twenty-one years exist. This state of affairs is unlikely to be quickly

affected by the recent approval of a Uniform Statutory Rule by the National

Conference of Commissioners on Uniform State Laws.40 Interest in the Rule is

confined to a small group of lawyers. Lawyers who have succeeded in securing a

reform version of the Rule that they find satisfactory are unlikely to undertakedisplacing an existing reform statute.

In short, variation in approach has characterized the reform movement. When

we encounter a perpetuities question, we are advantaged by our knowledge of the

Rule in orthodox form, but we must put ourselves in a particular jurisdiction and

determine what version of the Rule governs our case.

A. Wait-and-See

Wait-and-see means just that. If an instrument of transfer includes a futureinterest that violates the Rule in orthodox form, but the jurisdiction whose laws

govern the instrument has a wait-and-see version of the Rule, we usually wait to see

whether the interest vests or fails, as the case may be, within the perpetuities period. 41

A straightforward version of wait-and-see is a variation on Gray's statement of the

Rule in orthodox form: "No interest is good unless it vests, or fails by its own terms,

not later than twenty-one years after some life in being at the creation of the interest."

The test for validity under the Rule in wait-and-see form is an actualities test. For

example, if A devises land "to B for life, remainder to that child of B who first attains

age 25," and B survives A, but no child of B has attained age twenty-five at A's

38. See supra note 14 and accompanying text.39. An example of an American reform statute is that of Pennsylvania, 20 PA. CONS. STAT. ANN. § 6104 (Purdon

1975), amended by § 6104(d) (Supp. 1988), § 6105 (Purdon 1975). An example of a more complex reform statute is that

of England, Perpetuities and Accumulations Act, 1964, 13 Eliz. 2, ch. 55; see generally 33 HALSBURY'S STAT. OF ENGLANDAND WALES 511 (4th ed. 1987).

40. See supra notes 5-7 and accompanying text.41. R. LYNN, THE MODERN RuLE AGAINST PE'Rumst=Fs 34 (1966).

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death, we wait to see what the turn of events is. If B dies thereafter never having hada child, the contingent remainder fails. If all children of B predecease B, none havingattained age twenty-five, the contingent remainder fails. If no child of B attains agetwenty-five during B's lifetime, and B dies survived by children C and D, ages twoand one, respectively, both born after A's death, the remainder fails because neitherC nor D can attain age twenty-five within B's lifetime and twenty-one years. And adeclaration of invalidity under the Rule at B's death is appropriate because there isnothing further to wait for. If C and D are ages five and four, respectively, at B'sdeath, we wait to see whether the contingent remainder vests or fails, as the case maybe, within twenty-one years after B's death. If the remainder does vest within theperpetuities period, it is valid under the Rule in wait-and-see form. But the remaindermight fail. A wait-and-see version of the Rule is less rigorous than the Rule inorthodox form, but wait-and-see does not guarantee vesting.

As noted in the preceding paragraph, if there is nothing to wait for, a declarationof failure to comply with the requirements of the Rule in wait-and-see form isappropriate. Consider one more example. If A devises "to B for life, remainder tothat child born to (not adopted by) B who first attains age 25," and B is a female whosurvives A but is childless and incapable of both conceiving and bearing a child, adeclaration of failure of the contingent remainder is permissible on A's death.42 A

legislature adopting a wait-and-see version of the Rule intends to permit withholdingjudgment on the validity of a questioned future interest when withholding judgmentserves a useful purpose. If no useful purpose is served, judgment can be immediate.

B. Cy Pres

A contingent future interest that violates the Rule in orthodox form might berecast to conform to the requirements of the Rule if reformation is permissible in thejurisdiction. 43 For example, if A devises land "to B for life, remainder to that childof B who first attains age 25," and B survives A, but no child of B has attained age

twenty-five at A's death, the contingent remainder can be reformed under a cy presversion of the Rule to read "remainder to that child of B who first attains age 21."

Under a wait-and-see version of the Rule we do not wait if there is nothing to

wait for. Similarly, under a cy pres version of the Rule we do not reform ifreformation is futile. If A devises "to B for life, remainder to that child born to (notadopted by) B who first attains age 25," and B is a female who survives A but ischildless and incapable of both conceiving and bearing a child, a declaration of thefailure of the contingent remainder is permissible on A's death. Reformation wouldbe pointless, and judgment of invalidity can be immediate. A cy pres version of the

42. Adoption, freezing sperm, in vitro fertilization, and surrogate motherhood have complicated the already untidyaspects of family law and gratuitous transfers. Just as a rational law on perpetuities excludes a conclusive presumptionof fertility, so too it excludes possibilities of adoption, conception, and birth that run counter to the probable intention ofthe donor and preclude the reasonably prompt final settlement of disputes over property. A general discussion of how to

interpret the Rule in the light of changing conditions is found in Lynn, Raising the Perpetuities Question: Conception,

Adoption, "Wait and See," and Cy Pres, 17 VAND. L. REv. 1391 (1964).43. See Lynn, supra note 42.

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Rule is less rigorous than the Rule in orthodox form, but cy pres does not guaranteevesting.

When wait-and-see and cy pres are combined in a reform version of the Rule,

they work in tandem. If A devises "to B for life, remainder to that child of B who first

attains age 25," and B survives A but no child of B has attained age twenty-five at

A's death, we wait to see whether a child of B does or might attain age twenty-five

within the perpetuities period. If no child of B attains age twenty-five during B's

lifetime, and B dies survived by children C and D, ages five and four, respectively,both born after A's death, we wait to see whether the contingent remainder vests orfails, as the case may be, within twenty-one years after B's death. Under these facts

we do not reform the remainder at B's death. However, if C and D are ages two and

one, respectively, we reform the remainder at B's death to read "remainder to thatchild of B who first attains age 21." We reform the remainder at B's death becauseneither C nor D can attain age twenty-five within B's lifetime and twenty-one years.

Although neither a wait-and-see nor a cy pres version of the Rule guaranteesvesting, cy pres often permits us to go beyond actualities and allows us to restructurea limitation so that it conforms to the Rule. In this respect cy pres is more liberal thanthe wait-and-see approach, and this liberality is the basis for the argument that if wewish to reform the Rule in orthodox form, cy pres "does it all."

C. The Measuring Lives Under Wait-and-See

The first wait-and-see statute provided that "[u]pon the expiration of the period

allowed by the common law rule against perpetuities as measured by actual rather

than possible events, any interest not then vested and any interest in members of aclass the membership of which is then subject to increase shall be void."44 Implicit

in this statement of the wait-and-see approach is the assumption that under a

wait-and-see version of the Rule the perpetuities period is measured by relevant livesin being at the creation of the interest and twenty-one years, just as it is under the Rule

in orthodox form. The Uniform Statutory Rule Against Perpetuities abandons this

assumption in favor of a ninety-year wait-and-see perpetuities period. 45 The formu-lation of wait-and-see in the Uniform Statute is succinct, and in this respect is amarked departure from the earlier wait-and-see statutes.

The Restatement (Second) of Property lists the measuring lives used to

demonstrate validity of a questioned interest under wait-and-see. 46 To the extent thatthe lives listed include those that all would agree are relevant to vesting, the

Restatement (Second) breaks no new ground. But to the extent that listing adds

measuring lives not relevant to vesting, the Restatement (Second) will complicate thetask of lawyers representing clients in controversies arising under older, well

established wait-and-see versions of the Rule. The ninety-year wait-and-see period of

the Uniform Statutory Rule affects the law only insofar as the uniform act is adopted.

44. 20 PA. CONS. STAT. ANN. § 6104 (Purdon 1975), amended by § 6104(d) (Supp. 1988).45. See supra note 6 and accompanying text.46. REsTATEENT (SECOND) OF PROPERTY § 1.3(2) (1983) (Donative Transfers).

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The effect that the listing of irrelevant lives as measuring lives has on the law turnson the extent to which the Restatement (Second) is regarded as authoritative by ageneration of judges more aware than their predecessors of the political process thatis an undeniable part of the proceedings of the American Law Institute.

IV. LIVING WITH THE RULE TODAY

What and how should we think about the Rule as we leave the twentieth centuryand move into the twenty-first?

First, as drafters of deeds, wills, and trusts, we should advise clients not tocreate future interests unless both the nature of the subject matter and the objectivessought to be achieved justify doing so. Persons with little property usually shouldmake outright gifts, uncomplicated by future interests, and lawyers are obligated topoint that out.

Second, although reform versions of the Rule facilitate saving gifts that violatethe Rule in orthodox form, as drafters of legal documents, we should make certainthat the documents we draft conform to the requirements of the Rule in orthodoxform. If those requirements are met, there is no need to resort to either wait-and-seeor cy pres, and if a dispute arises and litigation ensues, a declaration of validity isappropriate. The existence of a reform version of the Rule in a jurisdiction mighttempt the drafter to be less cautious than he or she otherwise would be. Thattemptation should be resisted. Persons owning property and executing documentschange domiciles with great regularity. They own property in states other than thatwhere they are domiciled. A document drafted in one jurisdiction might be construedand applied years later in another jurisdiction. Drafting should conform to therequirements of the Rule in its most stringent form, and careful drafting should becomplemented by inclusion of a perpetuities savings clause in the document. 47

Third, although the share of the population that uses the law of future interestshas been small and will remain so, we cannot assume that if the Rule were abandonedaltogether, donors would invariably seek to control wealth for a length of time thatall thoughtful persons would agree is not excessive. If the Rule did not exist, somekind of device to curb the whims of the egotist would have to be invented.48 The Rulehas been around for a long time. We can and do modify its characteristics in itstraditional form, we reform it, and we sensibly allocate less teaching time to it withevery passing year. But we should not assume that the Rule has outlived its usefulnessand can be forgotten. The Rule exists, and it will persist in some form.

Fourth, there are a number of versions of the Rule, and we must identify theversion of the Rule that will be controlling in a particular case. Doing so requires usnot only to identify the appropriate jurisdiction, but also to fix the time frame within

47. See supra subpart II(A)(5).48. Sol Goldman died on October 18, 1987, survived by an estranged spouse and three children. He left an estate

of one billion dollars, now the subject of dispute between the widow and the children. He reportedly hoped that his realestate empire of some 600 properties would be kept intact "for his grandchildren and his grandchildren's grandchildren."N.Y. Times, Sept. 25, 1988, § 10 (Real Estate), at 1, col. 3.

1989]


which relevant events occurred. Changes in property law are rarely retroactive.Perpetuities questions sometimes arise years after relevant events have occurred. Aversion of the Rule that exists in a jurisdiction today might not be the version of theRule that is decisive in the case we are considering.

Fifth, although the Rule was created by judges to police the transmission ofwealth from generation to generation among families, it has been applied tocommercial transactions, and, indeed, a significant share of the relatively fewrecently reported perpetuities problems arose in a commercial rather than a familysetting.49 Therefore, we should not assume that if a law practice does not includefamily law, estate planning, or administration of estates, the strictures of the Rule canbe ignored. It is just as embarrassing for the real estate development lawyer to learnthat he or she has violated the Rule as it is for the estate planner to learn that adispositive scheme has been skewed by a violation of the Rule.

Sixth, when we examine a document that might pose a perpetuities problem, weshould remind ourselves that our ability to identify a violation of the Rule turns on ourknowledge of all the relevant facts. The Rule applies to a limited number of futureinterests, and our ability to identify a future interest subject to the Rule requires us toclassify interests in accordance with the rules of construction. When we construelimitations, we put ourselves at a particular date and ask such questions as: Who isalive? Who is dead? What contingency or contingencies have been attached to thegift? Has a contingency, such as attaining the age of twenty-five, already beenfulfilled at the effective date of the document? If we know all the relevant facts, andconstruction is unarguable, we can identify a violation of the Rule in orthodox form.If the rule in wait-and-see form governs, in some instances we can identify a violationof the Rule, and in other instances we can see that an interest might violate the Rule,depending upon the turn of events. If construction is arguable, we can take accountof the proclivity of twentieth-century judges to construe in a way that precludes aviolation of the Rule, and we can set out alternative analyses under either version ofthe Rule. If cy pres exists, we can determine how to restructure an invalid limitationto conform to the requirements of the Rule.

Finally, we should not assume that modifications of the Rule recommended ormade from time to time indicate any significant shift in American attitudes on controlof wealth by the dead. Defenders of the Rule in its early twentieth-century form eitherdo not exist at all or, if existing, are silent. Where the Rule exists in orthodox form,its indefensible harsh effects have been mitigated by statutory modifications and byconstructional preferences that preclude invoking the Rule to invalidate a gift. Whereshifts from the orthodox Rule to less rigorous forms of the Rule occurred in the thirtyyears after World War II, the shifts were accompanied by a vigorous exchange ofviews on the wisdom of change, but both the wait-and-see and cy pres versions of theRule that were adopted in the United States in those years were relatively simple.Although the listing of measuring lives in the Restatement (Second) and therecommendation of a ninety-year period in gross by the Commissioners on Uniform

49. See supra note 16.

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State Laws in this last decade are departures in the United States from simplicity inreform, neither of these events shows a remarkable change in contemporary views onthe use of trusts and wills to provide for families over several generations.

We do not know whether lawyers and judges will accept the listing of measuringlives as persuasive, or whether legislatures in significant numbers will enact theUniform Statute. What we do know as we move into the twenty-first century is thatany version of the Rule that we encounter presupposes mastery of the Rule inorthodox form, and that no version of the Rule that we encounter frees us from ourobligation to draft documents that conform to the Rule in orthodox form. Documentsthat clearly conform to the Rule in orthodox form reduce the likelihood of the disputeand litigation that disrupt families and reduce the donor's gifts by costs and fees.Promoting family harmony and keeping the donor's gifts intact are clearly in thepublic interest.